Citation

Harrington S, Litan RE. Science 1988; 239(4841): 737-741.

Copyright

(Copyright © 1988, American Association for the Advancement of Science)

DOI

unavailable

PMID

unavailable

Abstract

In this article the reasons for recent dramatic premium increases for liability insurance are explored by examination of available data on industry premiums, losses, and expenses. The suggestions that the premium increases were primarily caused by collusion among insurers, cyclical behavior, or systematic errors in forecasting losses are rejected. Instead, the evidence indicates that the jump in liability insurance premiums is most plausibly due to the growth in the discounted value of expected liability losses.